Chesapeake Energy Corp. said Friday it would pay $315 million to buy land driller Bronco Drilling Co. Inc. to advance its goal to own two-thirds of the rigs it operates in its unconventional drilling program.

The cash tender offer, which includes debt and net working capital, would give Edmund, OK-based Bronco an estimated $11/share for its outstanding common stock, which represents a 6% premium above the NASDAQ closing price on Thursday. The price is a 24% premium over Bronco’s average closing price for the 90-day period, Chesapeake said. In heavy trading Friday Bronco’s shares rose almost 6%, ending the day at $10.99.

“We have known and admired Bronco’s management team and assets for years,” said Chesapeake CEO Aubrey McClendon. “The acquisition of Bronco is a great additional step in our vertical integration strategy and increases confidence in our plan to ramp up drilling activities in highly lucrative, liquids-rich unconventional resource plays.”

Bronco owns 22 drilling rigs that primarily operate in the Williston and Anadarko basins, including three that are under contract with Chesapeake, which is Bronco’s second largest customer. According to Tudor, Pickering, Holt & Co. Inc., Bronco has three mechanical rigs and 19 silicon-controlled rectifier rigs with 1,000-2,000 hp, “but nothing state-of-the-art.”

Once the transaction is completed Chesapeake plans to integrate the rigs into subsidiary Nomac Drilling LLC, which now owns 95 rigs, 90 of which are under contract to Chesapeake. The Oklahoma City-based explorer said it now is operating 160 drilling rigs and plans to end 2012 using about 200 rigs. Bronco would become a Chesapeake subsidiary.

Acquiring Bronco “should satisfy the vast majority of Chesapeake’s anticipated rig investment needs through 2012,” the producer said.

The deal, unanimously approved by the boards of directors of both companies, is to be completed in two steps. The first step is the cash tender offer by a Chesapeake subsidiary to acquire Bronco’s outstanding shares. The tender offer is to be followed by a merger, in which an offer would be made to those holding common stock not purchased in the tender offer to receive the same per-share price offer, in cash, without interest.

Chesapeake said it soon would launch the tender offer; closing is expected by the end of June. The transaction, it noted, is not subject to or conditioned upon financing arrangements.

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